1028 Application for Recognition of Exemption Under Section 5

1028

Form

(Rev. September 2006)
Department of the Treasury
Internal Revenue Service

Application for Recognition of Exemption
Under Section 521 of the Internal Revenue Code

OMB No. 1545-0058

For the use of farmers’, fruit growers’, or like associations applying for recognition of
exemption as cooperatives.
©

See separate Instructions.

If your organization does not have an organizing document, do not file this application. Every organization must furnish all the information specified
on the form and in the instructions. An attachment may be used if more space is needed for any item. If the required information and appropriate
documents are not submitted along with Form 8718 (with payment of the appropriate user fee), the application may be returned to you.

Part I

Identification

1a Full name of organization (See instructions.)

b Employer identification number (See
instructions.)

2a Number, street, and room or suite no. (or P.O. box number if mail is not delivered to street address)

b City or town, county, state, and ZIP code

3

Name and telephone number (including area code) of person to be
contacted during business hours
(

4

Date incorporated or formed

5

Month the annual accounting period ends

)

6a Has the organization filed Federal income tax returns?
b If “Yes,” state the form numbers, years filed, and Internal Revenue office where filed

Part II

Yes

No

©

Type of Entity and Organizational Documents (See instructions.)

Check the applicable entity box below and attach a conformed copy of the organizing and operational documents listed.
Corporation—Articles of Incorporation, bylaws
Other—Constitution or Articles of Association, bylaws

Part III
1
a
b
c
d
2
a
b
c
d
e

Activities and Operational Information

Number of shares of each class of capital stock currently outstanding, if any, the value of the consideration for which issued,
Shares
Amount
Rate of Dividend
and the rate of dividend paid:
1a
Preferred stock (voting)
1b
Preferred stock (nonvoting)
1c
Common stock (voting)
Common stock (nonvoting)
1d
Number of shares of capital stock (other than nonvoting preferred) owned by:
Producers
Nonproducers
Current and active producers
Total number of shares—Add lines 2a and 2b
Percentage owned by current and active producers—Divide line 2c by line 2d

2a
2b
2c
2d
2e

%

3

What provision is made for retiring the voting stock held by a nonproducer?

4

Describe who is accorded voting rights in the cooperative and how many votes one person may have. If a person may be
entitled to more than one vote, explain in detail how voting rights are acquired.

5

Legal rate of interest in the state where the association is located

Please
Sign
Here

©

Under penalties of perjury, I declare that I am authorized to sign this application on behalf of the above organization; and I have examined this application,
including the accompanying statements, and to the best of my knowledge and belief it is true, correct, and complete. (See General Instruction “C.”)

©

(Signature)

(Title or authority of signer)

For Paperwork Reduction Act Notice, see page 2 of the separate instructions.

Cat. No. 17138N

(Date)
Form

1028

(Rev. 9-2006)

Form 1028 (Rev. 9-2006)

Part III
6

Page

Activities and Operational Information (Continued)

If the association issues any nonvoting preferred stock, explain whether the owners, upon dissolution or liquidation, may
participate in the profits of the association beyond fixed dividends.

7a Does state law require the accumulation and maintenance of reserves?

Yes

No

Amount

b If “Yes,” state the names and purposes of the reserves and enter the amount of each:

8a Does the association maintain or plan to maintain any reserve or reserves other than those required by
state law?

Yes

No

Amount

b If “Yes,” state the names and purposes of the reserves and enter the amount of each:

9

2

Does the association deal or plan to deal with both members and nonmembers?

10a Does the association pay or plan to pay patronage dividends?
b If “Yes,” are they paid or will they be paid to all patrons, both member and nonmember, on the same basis?
11a Is the allocation of patronage dividends based on an obligation in existence before the cooperative
received the amounts allocated?
b If “Yes,” is the obligation in:
Organizing document (specify) ©
Bylaws

Yes
Yes
Yes

No
No
No

Yes

No

12

Explain all of the activities in which the association is or will be engaged.

13

Explain how distribution is or will be made of the proceeds of products marketed for members and nonmembers. Also, if
the organization operates on a basis of allocated units (i.e., functional, departmental, etc.), explain how losses are or will
be treated.

14

Explain how the association charges for supplies and equipment bought for members and nonmembers.

Form

1028

(Rev. 9-2006)

Form 1028 (Rev. 9-2006)

Part III
15

Page

3

Activities and Operational Information (Continued)

Explain the requirements for membership in the association.

16

Federated cooperatives only:
a Are all the association’s member cooperatives exempt under section 521?
Yes
No
b If “No,” do the nonexempt member cooperatives have the same annual accounting period as the
association’s?
Yes
No
c If “No,” to 16b, check the method below that the association used, or will use, to provide a common or comparable unit of
time for analyzing and evaluating its operations and those of its members.
Note: Methods listed below do not apply to the filing of returns or the manner in which operating results are reported by a
federated cooperative and its members.
1.
Method 1—The association uses the operations of members for those months that correspond to the months that
make up its tax year.
2.
Method 2—The association uses the tax years of members that end within its tax year.
3.
Method other than 1 or 2 above (explain) ©

17

Value of agricultural products marketed or handled
for: (See instructions.)

*a Members—
1. Actually produced by members
2. Not actually produced by members but
marketed by them through the association
b Nonmembers—
1. Actually produced by nonmembers
2. Not actually produced by nonmembers but
marketed by them through the association
c Nonproducers (purchased from nonproducers for
marketing by the association)

Current tax
year
(a) From
to

3 prior tax years
(b)

(c)

(d)

18

Value of supplies and equipment purchased for or
sold to: (See instructions.)
*a Members who were producers
b Nonmembers who were producers
c Members and nonmembers who were not producers

19

Amount of business done with the United States
Government or any of its agencies

20 Does the association plan to do business with the United States Government or any of its agencies in the future?
21a Were all of the net earnings (after payment of dividends, if any, on capital stock) for the years shown on
lines 17–19 distributed as patronage dividends? (See instructions for lines 17–19.)
b If “No,” were undistributed net earnings apportioned on the records to all patrons on a patronage basis?
22a Has the organization operated in a manner consistent with the information given since the date formed?
b If “No,” state the changes that have occurred and dates of the changes.

Yes

No

Yes
Yes
Yes

No
No
No

*If it is necessary to own one or more shares of stock in order to become a member, include on lines 17a and 18a only the amount
of business transacted with persons actually owning the required number of shares.
Form

1028

(Rev. 9-2006)

Form 1028 (Rev. 9-2006)

Part IV

Page

4

Financial Data (See instructions.)
Complete the Statement of Receipts and Expenditures and Balance Sheets for the current year and for each of the
three immediately preceding years that the organization was in existence.

Expenditures

Receipts

Statement of Receipts and Expenditures, for period ending
,
.
(If you prepare a statement of receipts and expenditures that is more descriptive and detailed than the statement below, you
may submit that statement instead of this one.)
1
1 Gross dues and assessments from members
2
2 Gross dues and assessments from affiliated organizations
3a Gross amount derived from activities related to organization’s exempt
purpose (attach schedule)
b Less cost of goods sold
4a Gross amount from other business activities (attach schedule)
b Less cost of goods sold
5a Gross amount received from sale of assets, excluding inventory items
(attach schedule)
b Less cost or other basis and sales expense of assets sold (attach schedule)
6 Interest, dividends, rents and royalties
7 Other receipts (attach schedule)
8 Total receipts—Add lines 1 through 7 in far right column
9
10
11
12
13
14
15
16
17
18

Enter
dates

Assets

Cash
Trade notes and accounts receivable (less allowance for bad debts)
Inventories
Investments (attach schedule)
Other current assets (attach schedule)
Depreciable and depletable assets (less accumulated depreciation/depletion)
Land (net of any amortization)
Other assets (attach schedule)
Total assets

28
29
30
31
32
33

Accounts payable
Mortgages, notes, bonds payable in less than one year
Other current liabilities (attach schedule)
Mortgages, notes, bonds payable in one year or more
Other liabilities (attach schedule)
Patronage dividends allocated in noncash form, other than capital stock and
interest-bearing obligations
Per-unit retains allocated in noncash form

35

a
b
c
d
36
37
38
39

) 4c

5a
5b (

19
20
21
22
23
24
25
26
27

34

) 3c

) 5c
6
7
8
9
10
11
12
13
14
15
16
17
18

Compensation of officers, directors, and trustees (attach schedule)
Other salaries and wages
Interest
Rent
Depreciation and depletion
Dues and assessments to affiliated organizations
Other expenditures (see instructions—attach schedule)
Patronage dividends (see instructions—attach schedule)
Total expenditures—Add lines 9 through 16
Excess of receipts over expenditures (line 8 less line 17)

Balance Sheets

Liabilities and Capital

3a
3b (
4a
4b (

Capital stock (enter numbers at
end of year):
35a
Voting preferred stock
35b
Nonvoting preferred stock
35c
Voting common stock
35d
Nonvoting common stock
Paid-in or capital surplus
Retained earnings (attach schedule)
Less cost of treasury stock
Total liabilities and capital

Beginning date

Ending date

©

19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34

Number of shares
Number of
shareholders

Issued for
money

Issued as
patronage benefits

36
37
38 (
39

)(
Form

)

1028

(Rev. 9-2006)